How we bought a house

This afternoon, barely two months after B and I started looking, we closed on our new home! I could go on and on about how excited we are (very!) and how crazy it seems that it’s really ours (totally!) and how I-just-can’t-wait-to-move-in-this-very-second!! But I feel I couldn’t really do it without using an obscene amount of exclamation points… and so that post may have to wait.

While contemplating all of the excitement/craziness this morning I thought of how far we’ve come in two months, how steep the learning curve on this type of thing is, and thought about some of the things that really drove me nuts about the process. By and large, the thing that drove me absolutely bat-shit-crazy was that I never really felt like I could get a grasp on the process. No one could give me the WHOLE picture. It was always “well I’ll help you with x… then you’ll go on to the next step and I don’t really know what happens there.” I’m a big picture person and I can’t handle that. I mean.. I did. And I got through it. But there is just no reason it had to be so confusing.

One of the problems, I think, is that buying a house is something that people do on average maybe once every ten years, max. They’re confused when they do it, and its stressful, and within 6 months it’s really hard to remember what all happened. I just closed today and I’m already fuzzy on some of the details. So, I thought I’d write down the path we took, from searching to closing. I’m sure there’s a thousand ways this can be done… but here is how WE did it.

1) We started doing some online research about neighborhoods/house types/pricing so that we would have a good idea what was out there and what we might want.

2) Make a rough budget to figure out how much of a down payment we’d have, and how much we could comfortably afford per month. Use an online mortgage calculator to plug in those variables and figure out how much house we can afford
– Note: Unfortunately there are monthly payments you’ll be making as part of your “mortgage” payment that are in addition to principle + interest, and these can be really hard to estimate. These include taxes, home owners insurance, home owners associate fees (if any), and private mortgage insurance (if any). We just used the suggested amounts for these and then kind of “rounded down” on what we could afford.

3) Figure out what area(s) you can afford to buy in and what type of house you’re looking for. I then started emailing sales agents for new home builders and finding houses online that we’d want to see. I just googled “columbus ohio real estate” and when I found houses I liked, I clicked “request a showing.” You could also ask for recommendations on realtors, but no one we knew in columbus had a realtor they were happy with so I just asked google.

4) Get pre-approved for a loan. We went to lendingtree.com and filled out their application for quotes. We got “pre-qualified” for three different companies. We wanted to get a pre-approval letter (which means that as long as we didn’t lie to the company, they will loan us the money they promised to) so that if we found a house we loved we could show the seller we were serious and could move quickly. To get a pre-approval letter, contact one of the companies that gives you a pre-qualification and tell them what you’re looking for and what you want.

5) Once you find a house, you’ll make an offer. This was a little different for us because we bought a “spec house” which is a house that a builder builds without a buyer in mind. So, there was really no bidding. (You may have to put down “good faith money” which shows the seller you’re serious. We had to put down a $500 deposit. Both are applied to the amount due at closing)

6) Once we had an agreement to buy, we had to sign a sales contract with the sales agent. Basically, the contract said that we had 7 days to apply for financing for the house and 30 days to have an inspection done on the house if we wanted to. If something went wrong in those 30 days, we could back out of the deal.
– Note: because we bought a new house, it has a 1 year warranty for everything, 10 year structural warranty, and a 30 year foundation warranty. Because of that an inspection was unnecessary. But, if you’re buying a house that isn’t brand-new you DEFINITELY need an inspection

7) paperwork hell. Apply for a loan from the company that offers you the best deal and start gathering a ridiculous amount of paperwork. Tax returns for several years, bank documents, retirement documents, on and on. Seriously… pretty much everything financial for the last two years…. you need it. Keep your shit together now and save yourself a headache. Also– decide which type of loan you want! Conventional or FHA.

8 ) Once you get approved for your financing, its time to find homeowners insurance. Probably whoever does your car insurance can do your homeowners too. We shopped both our agents and went with the better quote.

9) You’ll get something called a Good Faith Estimate that will estimate for you how much you’ll owe at closing. There are three main categories of costs due at closing: down payment, closing costs, and prepaids. Down payment is obvious. Closing costs are huge and honestly there’s way too many of them to try to list. It is basically stuff like lending fees, recording fees, etc. You can often negotiate to get these paid by the seller. Our seller paid ours. Prepaids are things that you have to pay ahead like real estate taxes, homeowners insurance, home owners association, and private mortgage insurance. These amounts are going to be drastically different depending on what kind of house you’re looking at, but for us the prepaids were about $1800.

10) A few days before you close you’ll get a call with the total amount due at closing and you have to go get a certified check from the bank. This is basically just to make sure that the check will clear when you give it to them so they’ll give you the keys.

11) Closing! Sit down for an hour with your beloved and sign your life away 2342 times. Just kidding. Kind of. Really… everyone made closing sound so bad that I think I was almost pleasantly surprised by how painless it was. There is a lot of paperwork but almost all of it is boiler-plate, and you really just go through and sign your name to all of it.

So, thats it! It really is a confusing process but coming out the other end helps me put it all in perspective. For all the frustration I’ve felt in the last two months, it really did all melt away when I used the key to enter our brand new home tonight. Every buying experience is different, but hopefully seeing our whole process will help someone with at least an example of the way things can go.

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omg omg omg… I’m famous!

Except, not really.

About four years ago I didn’t know what a blog was… let alone that there were blog celebrities. Now, unfortunately for my general productivity at work and in life, I am more than aware of this fact. One of the top blogger celebrities has got to be The Pioneer Woman. She kind of does it all… great blog + great cooking blog + great photography blog + great home blog… basically unless you want to talk politics or tech (and I really don’t), its a one-stop-shop for all your blogging needs. Love!

For a while now she has run photo contests where she calls her readers to submit their favorite photos under a certain topic. Each topic gets thousands of submissions, and I never really bothered to submit my photos because… I don’t really know why. Low self confidence I guess. I know that people say my photos are good but its hard to see that about yourself.

Well.. her latest contest was for sunset photos and we all know I took about a thousand of those on our trip to PV. I couldn’t resist and I already had my photos on flickr so I got over my anxiety and did it. I had a really hard time choosing, but I decided on the same one I recently got blown up BIG (think Leno’s chin and Dolly’s boobs big) and put on canvas for B’s and my living room in our new house:

I was SHOCKED when my photo was picked for the very first group! I mean… with thousands of entries to pick from, she picks mine? Really? It pretty much made my night. I never ever thought I’d be a finalist though… just way too many amazing photos.

So imagine my surprise when I casually wander over to the site tonight and see…. I’m a finalist!!! I can’t even describe how excited I am about this.

It isn’t just because I “won over” so many other people to get this far… but mostly because so many people will see my photo! Ree gets tens of thousands (actually hundreds of thousands I think) of hits every day…. and those people are going to see MY photo? Are you freakin’ kidding me? I hate calling photography art because you don’t so much create it but capture what is already there… but whatever it is it just makes me so happy that what I created/captured is actually going to be seen by someone other than guests in my house and my family.

Since this photo got chosen in the first group three days ago I’ve gotten almost 350 hits on my flickr page photo…. which tops my next most popular photo by about 330 hits. What this really shows me is that I need to stick with the photography thing. I need to figure out a way to get my photos out there. Even if I never make any real money at it (although how amazingly cool would it be if this were my JOB??). Because it doesn’t feel like work. I love taking photos. I love editing them (ok maybe slightly less than the taking them but I’m learning!). And I LOVE sharing them.

So, I think I am adding a new years resolution to the list: Momentum. I am going to pledge to keep momentum going with my photography. Every month, at a minimum, I’m going to make sure that I’m doing something productive to my photography business. I think it was Warren Buffet who said (paraphrasing here): Do what you love and the money will come.

I’m going to cross my fingers he was right.

(Although… it seems to me that what he loved was building businesses which is by nature more lucrative than taking photos… but whatever. Minor detail)

A morning in the house…

While watching Gus Johnson announce the Michigan St. v. Minnesota game

B: This guy? Would make an awesome announcer for the wedding.

Me: Um… weddings don’t have announcers.

B: Oh. Like… a dj or something?

Me: I’m blogging this conversation

B: Why is my life fodder for a blog now?

Overheard in my office

Boss: Get certified copies of the defendant’s convictions. We might need them at trial.

Me: ok.

Boss: Our guy doesn’t have any felonies or anything does he?

Me: No. Well, not really. He got arrested once but the charges were dropped.

Boss: Arrested for what?

Me: Stabbing someone.

Boss: Eh, what the hell. That’s not so bad, look at Jack Bauer!

True Story

Tonight, B went to the grocery store to get a large bag of chicken wings (which he planned to eat all week). He didn’t get a cart, because he doesn’t like carts.

On the way to the chicken wings, he saw the candy aisle and gummy bears were on “super special.” So he got three pounds of them. Then he got two containers of ice cream, and two cans of pringles.

At this point, he couldn’t carry any more so he checked out and went home. With three pounds of gummy bears, two containers of ice cream, and two cans of pringles. And no chicken wings.

Thank God he’s moving in with me in two weeks or he might not make it to 40. True story.

On standing up for yourself…

I mentioned earlier that I had to lay the smack down on the financial folks when buying our house, and its time for me to explain. B and I are first time home-buyers.. clearly. We’re reasonably intelligent people, both with college degrees, stable jobs, and a working understanding of personal finance. I’m an attorney who reads and writes legal documents for a living and B works in corporate finance. All of this to say– as first time home buyers go, we should be ahead of the curve on what we understand about the process, the vocab, and the documents involved in buying a home.

That is why I was so surprised when I received our good faith estimate of closing costs and prepaids from the financial lady, and I didn’t understand most of what I was looking at. I sent it to B, and he didn’t understand either… clearly, this document was not made to be easily deciphered by the home buyer. I’m not one to agree to anything I don’t fully understand (especially when you’re talking about spending hundreds of thousands of dollars and signing a 30 year mortgage), so I went through the document very carefully and responded to the financial lady’s email with twenty-five numbered questions that I had about the document. I asked her to please respond to my email with the answer to each question inserted after the question in the text of the email. This way, I would have a written record of her answers and everything would stay organized.

Is this something most people do? Probably not. They probably assume that they’re not meant to understand and just say okay… but not understanding is not okay with me and I believe that people have a right to understand where their money is going.

Imagine my surprise, given my exceedingly clear email, when I received back a two sentence email that didn’t seem to directly answer any of my questions. Hm.. frustrating, but I didn’t give up. I responded:

To which of my questions are you referring? Could you please answer ALL of my questions as I asked?

Surely… this would solve the problem? I receive back an email with about 5 sentences… none directly referring to any of my questions just more general information. I was so confused. And at this point, pissed. Next up:

I have to be honest here that I am getting a bit frustrated. I am a first time home buyer and I do not think that I am being unreasonable in wanting to understand ALL of the money that will be coming out of my bank account for the next 30 years. I sent you a list of very specific questions that you seem very reluctant to answer. I am sure that it is annoying to answer the same questions for person after person and I am sure that you are very busy– I sympathize. However if we are seriously considering using M/I financial to finance the biggest purchase of our lives then I believe that I deserve to have ALL of my questions answered. I listed them very specifically with room for you to insert answers to make things as clear as possible so that we do not have room for misunderstanding. Please understand that what may be common sense to you– a person who works with mortgages for a living– is not common sense to someone who has never even purchased a car. I need to fully understand what I am doing here. There has already been some serious misunderstanding between M/I and myself due to imprecise emails, and I would like to avoid that problem again. I do not want to have to email you back 15 times to ask you each of the questions you are not answering individually.

If you are refusing to answer all of my questions please let me know right now so that I can assess my next move.

Bitchy? Maybe. But I stand by my statements. People will take advantage of you, they will glaze over facts, they will avoid answering questions. If I ask the same question over and over and I’m not getting an answer, I will not give up. I’ll just ask again. Because eventually? You will get answers to your questions.

Now, it did take several more emails before all of the questions were answered fully and to my understanding, but I am confident now that I understand every line of our estimate. Point being: STAND UP FOR YOURSELF. Don’t feel bad for asking questions. Don’t be intimidated if you’re getting ignored. Don’t feel stupid for not understanding! This is complicated stuff, and you deserve to understand it all!